If prices double in New York while the prices in Frankfort remain the same, the purchasing power of the dollar relative to the mark

Question

Quizplus · Accepted Answer

If the prices double in New York but remain the same in Frankfort, it means that goods and services in New York have become more expensive compared to Frankfort. This implies that the value of the dollar has decreased relatively to the mark, meaning that the purchasing power of the dollar has also decreased. Therefore, the correct answer is C) should decrease by 50%.

If Prices Double in New York While the Prices in Frankfort